Mary Hughes, 71, collected a fortune from the British Coal staff pension scheme on behalf of her late dad David McAleese. Hughes, from Newarthill, Lanarkshire, collected the cash after pretending the retired coal miner was still alive.
David, 85, of Bellshill, had moved in with his daughter and her family following the death of his wife Lucinda in 1992. But after he died Hughes forged her father's signature and continued to collect his pension entitlement.
She was only caught by officials in February last year, following a tip off, and admitted that dementia sufferer David had died from pneumonia in February, 1997.
The mother-of-three appeared at Hamilton Sheriff Court last month and pled guilty to obtaining £116,885.35 by fraud.
And yesterday she was warned she would have to sell her home to repay the debt or face the prospect of a prison term.
Prosecutors have applied for an order to seize her house under proceeds of crime laws but she has been given time to sell it to a family member.
Sheriff Ray Small told Hughes: "This is a very large sum of money, which you obtained, to which you were not entitled.
"The sentencing guidelines for frauds of this kind are that they should result in a custodial sentence.
"I am not convinced that is in the public interest given your age and your lack of a record and I am not going to do at that moment.
"I would be more content to see the money paid back."
A spokesman for the British Coal pension scheme refused to comment.
Sentence on Hughes was deferred until next month.